taxes

The final, drop-dead tax deadline is quickly approaching. S Corporations have their final returns due on September 15th, and personal tax returns are due October 15th (assuming both filed their 6-month extensions on time back in March and April, respectively.

Of course, the subject of paying taxes is always an emotional one for many people. Around this time of year we start seeing arguments that taxes are illegal, unconstitutional and voluntary. Just in case you’re curious, here’s the IRS position on that argument … along with some of the penalties they can choose from.

About a month ago I blogged about Nevada’s budget crisis, and how we were looking at having a special legislative session to find enough money to finish the year. We did (although how we’re going to fund next year will still be a challenge). Now, I’m reading reports that California is facing the same problem, except on a much larger scale.

There’s a lot of action going on right now in the tax world. Here are 3 quick summaries of some recent rulings:

What’s in store for business and investments in 2008? My typical answer, of course, is It Depends.

We have an election year and so I don’t expect any drastic moves in 2008. Most likely, we’ll have another last minute AMT patch, just like 2007. Once we have the election behind us, I think we’ll start to see some dramatic changes. Here are my top 3 things to do to be best prepared for tax law changes:

One of the most misunderstood business entities these days is the Limited Liability Company (LLC). I hear it all the time. “I’m taxed as an LLC.” But, the fact is there is no such thing as an LLC tax return. You get to choose how you want it taxed! But, here’s the rub. If you don’t choose, the IRS is going to choose for you. And, it may not be a choice you like.

If you have an LLC, especially a new one or one in which you started a new activity, now is the time to look at how you want your LLC to be taxed.

Have you been inundated with car dealership ads in the past couple of weeks all promising you a big tax break along with your new vehicle purchase? I have! My favorite was the one from Land Rover, who also included a packet of tea from those fine folks who provided the tea for the Boston Tea Party. So I thought I would take a couple of minutes and just go over how the vehicle purchase deduction works.

My Favorite Christmas Catalogue

Have you done your back of the envelope calculation for taxes you’ll owe for 2007? If not, this might be a good week to pull some of that information together. One of the most important questions to answer is whether you’ll be subject to Alternative Minimum Tax. Look for more strategies on how to get around AMT (and how to find out if you’re subject to it) through this Blog.

This month’s online workshops, offered as part of the First Class Lounge, are all about Last Minute Loopholes. These are the things you can do right now, to pay less tax right now.

The one thing I love about tax strategy planning is that it never gets boring. This year, 2007, looks to be a very interesting year. That’s because you can throw almost all of your old tax plans out the window if you’re subject to AMT (alternative minimum tax). If your income is over $50,000 for 2007, don’t ignore AMT — you might be subject to it this year.

The best sure-fire way to avoid or minimize AMT is to have a business. And that’s why tens of thousand of people are rushing to start a business before year end. Of course, you have to do it legally — and that’s why I’m featuring what it takes to have a business in the eyes of the IRS so you get all those deductions in this month’s First Class Lounge. There is one more wrinkle to having a business — how do you protect your assets and pay less tax at the same time?

The most successful business owners and investors I know use “outside the box” thinking. That’s what we do at Tax Loopholes and DKAffiliated™ (CPA services). We disclose tax saving strategies you can use right now to put more money in your pocket. The part that is “outside the box” is how we work with our clients to create amazing results in the quickest way possible. In fact, people that meet with me are saving an average of almost $30,000 per year — after just one meeting. It’s often not big changes, but lots of little ones, done in the right way so you have a legal and efficient strategy that makes all the difference.

How do you know if you, or your advisors, are using Outside the Box Tax Thinking? First, see how they measure up when it comes to these three strategies.

Does Your Tax Advisor Think Outside the Box?

To save money on taxes you’ve got to know how to use the loopholes that are out there. Here’s a great example of how one taxpayer offset active income in one business against the passive losses in another.